Report:

Following the Money 2012

The ability to see how government uses the public purse is fundamental to democracy. Transparency in government spending promotes fiscal responsibility, checks corruption, and bolsters public confidence.

In the past few years, state governments across the country have made their checkbooks transparent by creating online transparency portals. These government-operated websites allow visitors to view the government’s checkbook – who receives state money, how much, and for what purposes. Most of these websites are also searchable, making it easier for residents to follow the money and monitor government spending of many sorts. Today almost every state operates a transparency website with the state’s checkbook accessible to the public.

Over the past two years, the number of states that give citizens access to their state’s checkbook has increased from 32 to 46.

This report is WashPIRG Foundation's third annual ranking of states’ progress toward “Transparency 2.0” – a new standard of comprehensive, one-stop, one-click budget accountability and accessibility. The past year has seen continued progress, with new states providing online access to government spending information and several states pioneering new tools to further expand citizens’ access to spending information and engagement with government.

In 2011, eight states created new transparency websites and several others made significant improvements to sites already launched.

Connecticut, Delaware, Maine, Massachusetts, Mississippi, New Mexico, North Dakota, and West Virginia launched new checkbook-level transparency websites. Among the highlights:

Connecticut’s website excels in searchability, one of the most important elements of Transparency 2.0. The specific payments made to vendors can be found through searches by vendor, paying agency, short description of the good or service, year or amount.

Delaware’s website brings a new level of transparency to the state by posting spending data, such as county government expenditures, not covered in the state’s checkbook expenditure data.

Massachusetts’ new checkbook tool gives users the ability to monitor state spending in almost real-time because the data are updated nightly.

West Virginia’s website has been upgraded to become a leader in Transparency 2.0. The site allows residents to browse payments to vendors, research some of the state’s quasi-public agencies, and track the state’s economic recovery.

At least seven other states notably improved their transparency websites.

Michigan linked its transparency site to an interactive map that tracks economic development incentives, allowing residents to learn about government-funded projects in their county, information about how specific companies will spend the funds, and the estimated number of jobs to be created.

Washington officials launched the state’s online checkbook after they developed a system to remove data deemed private by the Health Insurance Portability and Accountability Act (HIPAA) and the Family Educational Rights and Privacy Act (FERPA), bringing an unprecedented level of transparency to Washington’s spending.

In order to assess states’ progress toward the standards of Transparency 2.0, each state’s transparency website was analyzed and assigned a grade from zero to 100, based on 13 scoring criteria measuring searchability and the breadth of information provided. Assigning these numbers to more familiar “A” to “F” grades makes it possible to describe five types of states.

Leading states (“A” range): Seven states have established user-friendly transparency portals that contain comprehensive information on government expenditures. Citizens and watchdog groups can use the sites to monitor government spending quickly and easily. Among the most distinctive features of Leading states’ transparency websites is the ability to compare state expenditures over time.

Advancing states (“B” range): Fourteen states have established websites that are user-friendly and searchable, but lack the breadth of information characteristic of the Leading states. Eleven Advancing states provide only limited information on the goods or services purchased because they do not provide copies of all contracts, while eight do not provide descriptions on grants and economic development incentives administered by the state.

Emerging states (“C” range): Fourteen states’ websites have checkbook-level detail and are easily searchable, but are far less comprehensive – in terms of checkbook detail, information on city and county spending, and tax expenditure data – than Leading or Advancing states.

Lagging states (“D” range): Ten states’ online checkbooks are difficult to use. Their sites rarely provide spending details for off-budget agencies, post information on state revenue forgone through tax expenditures, or link to city and county expenditure sites.

Failing states (“F”): Five states are failing in online transparency. Most Failing states have not posted their checkbooks online or provided other important information that allows residents to monitor state spending.

Government spending transparency is not a partisan cause. As was the case at the outset of 2010 and 2011, Democratic and Republican-leaning states perform equally well when it comes to transparency this year. The average score for a Democratic-leaning state (determined by political party of the current governor) was 70.2, while that of a Republican-leaning state was 68.9, a difference of less than two points. Among the seven states that scored an “A” or “A-” , 3 have Democratic governors and four have Republican governors. Among the five states that received an F, two have Democratic governors and three have Republican governors.

Some states have gone above and beyond standard Transparency 2.0 features. They have developed new tools and posted new sets of information on government expenditures, giving residents the unprecedented ability to monitor and influence how their government allocates resources.

Performance trackers: Louisiana’s Performance Accountability System has taken the lead on providing detailed performance evaluations of government agencies by listing specific agencies’ yearly objectives (e.g., “increase the annual number of visitors served by the state park system to at least 2,500,000 by the end of fiscal year 2012-2013”), along with their actual performance.

Mapping: Washington allows the public to see how specific areas of the state benefit from government spending by providing an interactive mapping tool with the exact locations of state-funded construction projects.

Statement of the checkbook’s comprehensiveness: Some states, such as Massachusetts, show how much spending is not included in their transparency sites or how much activity is contracted out.

Integration with local government transparency: Some states create programs to actively encourage greater transparency by recognizing local government transparency efforts or sharing platforms.

All states, including Leading states, have many opportunities to improve their transparency websites.

Only one state – Illinois – provides information on both the projected benefits and the actual benefits created from economic development subsidies.

Only six states provide visitors with copies of all contracts between a vendor and the state.

Only six states provide copies of tax expenditure reports that include the purpose of each expenditure program. In addition, only 24 states provide tax expenditure reports that include expenditure information for all of the significant major tax types (sales, income and property) that may be affected by tax expenditures.

Only 26 states include any information about expenditures or revenue collected by quasi-public agencies or public-private partnerships.

Only 20 states provide access to any level of information about city and county spending, and rarely is this information checkbook-level.

Four states – Arkansas, Idaho, Iowa, and Montana – have yet to post their checkbooks online.